10 HofewWOIKCarmen's Dress Delivery operates a mail-order business that sells clothes designed for frequent travelers. It had sales of $560,000 inDecember. Because Carmen's Dress Delivery is in the mail-order business, all sales are made on account. The company expects a 24percent drop in sales for January. The balance in the Accounts Receivable account on December 31 was $96,900 and is budgeted tobe $73,600 as of January 31.Requireda. Determine the amount of cash Carmen's Dress Delivery expects to collect from accounts receivable during January.Expected cash collection< Prev3 of 8Next >

Cash receipts in the particular period means how much cash has been received from the customers.

Answered: Carmen's Dress Delivery operates a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following data are from the budget of Ritewell Publishers. Half the company's sales are transacted on a cash basis. The other half are paid for with a 1-month delay. The company pays all of its credit purchases with a 1-month delay. Credit purchases in January were $140, and total sales in January were $290. TT February March $ 420 April Total sales $ 440 $ 400 125 135 115 Cash purchases Credit purchases Labor and administrative purchases Taxes, interest, and dividends Capital expenditures 95 85 95 85 85 85 65 65 65 210 Complete the following cash budget. (Leave no cells blank. Enter '0' when necessary. Negative amounts should be indicated by a minus sign.) February March Aprit Sources of cash Collections on current sales Collections on amounts receivable Total sources of cash 0 $ Uses of cash Payments of accounts payable Cash purchases o search
Peach Corporation's only cash receipts are those derived from customer sales. Peach makes both cash sales and sales on account. For its credit sales, Peach collects 50% in the month of the sale, 40% in the month following the sale, and 10% in the second month following the sale. Peach is preparing its cash budget for the upcoming year. Sales on account for the month of March are budgeted at $150,000. The budgeted accounts receivable balance on March 1 is $113,000, of which $90,000 represents uncollected sales made in February and $23,000 represents uncollected sales made in January. If Peach's total cash receipts for the month of March are budgeted at $205,000, what are Peach's budgeted cash sales during March? O $17,000 O $35,000 $53,000 $71,000 O None of the above
Moorcroft's assistant controller suggested that Moorcroft hire a part time collector to encourage customers to pay more promptly and to reduce the amount of uncollectible accounts. Sales are still 40% cash and 60% credit but the assistant controller predicted that this would cause credit sales to be collected 30% in the month of the sale, 50% in the month following sale, and 18% in the second month following sale; 2% are uncollectible. Prepare a schedule of expected collections from customers for June. How did these changes impact cash collections? Moorcroft Company Schedule of Expected Collections from Customers Sales April May June $ 173420 $ 191400 $ i 86710 i $ 173420 299000 330000 398000 $ i 340500 $ 230840 99000 32292 202932
Timpco, a retailer, makes both cash and credit sales (i.e., sales on open account). Information regarding budgeted sales for the last quarter of the year is as follows: October November December Cash sales $ 80,000 $ 71,000 $ 83,000 Credit sales 80,000 85,200 91,300 Total $ 160,000 $ 156,200 $ 174,300 Past experience shows that 5% of credit sales are uncollectible. Of the credit sales that are collectible, 60% are collected in the month of sale; the remaining 40% are collected in the month following the month of sale. Customers are granted a 1.5% discount for payment within 10 days of billing. Approximately 75% of collectible credit sales take advantage of the cash discount. Inventory purchases each month are 100% of the cost of the following month’s projected sales. (The gross profit rate for Timpco is approximately 30%.) All merchandise purchases are made on credit, with 20% paid in the month of purchase and the remainder paid in the following month. No cash discounts…
Metro, Incorporated sells backpacks. The Company's accountant is preparing the purchases budget for the first quarter operations. Metro maintains ending inventory at 15% of the following month's expected cost of goods sold. Expected cost of goods sold for April is $78,000. All purchases are made on account with 30% of accounts paid in the month of purchase and the remaining 70% paid in the month following the month of purchase. Sales January $ 44,000 February $ 58,000 Budgeted cost of goods sold Plus: Desired ending inventory Inventory needed Less: Beginning inventory March $ 64,000 8,700 52,700 (6,600) Required purchases $ 43,900 Based on this information the amount of accounts payable appearing on the March 31 pro forma balance sheet is Multiple Choice $19,830. $46,270. $66,100. None of the answers is correct.
Treasure Service anticipates the following sales revenue over a five-month period: Its collection history indicates that credit sales are collected as follows: E (Click the icon to view the sales data.) A (Click the icon to view the collections data.) The company's sales are 20% cash and 80% credit. How much cash will be collected in Janua More Info 25% in the month of the sale 50% in the month after the sale Complete the cash budget to determine how much cash will be collected in January, February, March and for the quarter in total. (Round your answers to the nearest whole do 20% two months after the sale Treasure Service 5% are never collected Cash Collections Budget For the Months of January through March January Data Table Print Done Cash sales Collection of credit sales: 25% Month of sale November December January February March 50% Month after Sales revenue....... 16,100 $ 10,000 $ 15,200 $ 12,000 $ 14,200 20% Two months after Total cash collections Print Done
Rooney Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Rooney’s policy is to maintain an ending inventory balance equal to 15 percent of the following month’s cost of goods sold. April’s budgeted cost of goods sold is $82,000. Required Complete the inventory purchases budget by filling in the missing amounts. Determine the amount of cost of goods sold the company will report on its first quarter pro forma income statement. Determine the amount of ending inventory the company will report on its pro forma balance sheet at the end of the first quarter.
Lim Auto Parts, a family-owned auto parts store, began January with $10,000 cash. Management fo that collections from credit customers will be $11,600 in January and $15,300 in February. The stor scheduled to receive $8,500 cash on a business note receivable in January. Projected cash payme include inventory purchases ($16,700 in January and $13,300 in February) and selling and adminis expenses ($2,900 each month). (Click the icon to view additional information about Lim Auto Parts.) Read the requirements. More info Lim Auto Parts' bank requires a $10,000 minimum balance in the store's checking account. At the end of any month when the account balance falls below $10,000, the bank automatically extends credit to the store in multiples of $1,000. Lim Auto Parts borrows as little as possible and pays back loans in quarterly installments of $2,000, plus 3% APR interest on the entire unpaid principal. The first payment occurs three months after the loan. Requirements 4 1. Prepare Lim Auto…
Stuart Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Stuart's policy is to maintain an ending inventory balance equal to 15 percent of the following month's cost of sold. April's budgeted cost of goods sold is $80,000. Required a. Complete the inventory purchases budget by filling in the missing amounts. b. Determine the amount of cost of goods sold the company will report on its first quarter pro forma income statement. c. Determine the amount of ending inventory the company will report on its pro forma balance sheet at the end of the first quar Complete this question by entering your answers in the tabs below. Req A Req B and C Complete the inventory purchases budget by filling in the missing amounts. Inventory Purchases Budget Budgeted cost of goods sold Plus: Desired ending inventory Inventory needed Less: Beginning inventory Required purchases (on account) January February March $ 57,000 $…
Gibson is a retail company specializing in men's hats. Its budget director prepared the list of expected operating expenses that follows. All items are paid when incurred except sales commissions and utilities, which are paid in the month following their incurrence. July is the first month of operations, so there are no beginning account balances. Salary expense Sales commissions (4 percent of sales) Supplies expense Utilities Depreciation on store equipment Rent Miscellaneous Total S&A expenses before interest Required a. Prepare a schedule of cash payments for selling and administrative expenses. b. Determine the amount of utilities payable as of September 30. c. Determine the amount of sales commissions payable as of September 30. Complete this question by entering your answers in the tabs below. Req A Req B and C July $18,300 August September $18,300 $18,300 2,800 2,800 2,800 290 320 350 2,500 2,500 2,500 2,700 2,700 2,700 5,700 5,700 5,700 790 790 790 $33,080 $33,110 $33, 140…
Del Spencer is the owner and founder of Del Spencer’s Men’s Clothing Store. Del Spencer’s hasits own house charge accounts and has found from past experience that 10 percent of its salesare for cash. The remaining 90 percent are on credit. An aging schedule for accounts receivablereveals the following pattern:15 percent of credit sales are paid in the month of sale.65 percent of credit sales are paid in the first month following the sale.14 percent of credit sales are paid in the second month following the sale.6 percent of credit sales are never collected.Credit sales that have not been paid until the second month following the sale are consideredoverdue and are subject to a 3 percent late charge.Del Spencer’s has developed the following sales forecast:May $60,000June 55,000July 45,000August 56,000September 83,000 Required:Prepare a schedule of cash receipts for August and September.
Hess Company has $15,000 in cash on hand on January 1 and has collected the following budget data: January February Sales $1,360,000 $640,000 Cash receipts from customers 851,850 871,300 Cash payments for merchandise inventory 561,700 532,416 Assume Hess has cash payments for selling and administrative expenses including salaries of $30,000 plus commissions of 11% of sales, all paid in the month of sale. The company requires a minimum cash balance of $12,500. Prepare a cash budget for January. Hess Company Cash Budget Two Months Ended January 31 and February 28 January Beginning cash balance Cash receipts Cash available Cash payments: Purchases of merchandise inventory Selling and administrative expenses Total cash payments Ending cash balance before financing Minimum cash balance desired Projected cash excess…

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